Why Hospitals Charge Auto Insurance, Workers’ Compensation Patients Much More Than Health Insurers

October 1, 2018

  • October 1, 2018 at 4:44 pm
    Puzzled in PA says:
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    Interestingly enough, this article does not even touch on the fact that commercial insurance coverage is subsidizing egregiously underpriced Medicare and Medicaid government medical reimbursement rates. This same situation exists in the nursing care market as well where the government tells the facility what rate they will get. I wonder if care at nursing homes and treatment at hospitals would improve if rates were higher to encourage more staff?

    • October 5, 2018 at 2:20 pm
      Analyst says:
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      Or maybe the push should be to encourage these facilities to learn how to operate on the lower margins. Every industry experiences pressure and has to reduce operating expenses because of it. The only difference here is that people can’t go anywhere else if they decide the healthcare is too expensive. Also, healthcare, unlike other industries, is a necessity to life so consumers do not have the choice to just stop using the products like other consumer goods. If the pizza I had for lunch increases prices too much then I can go to one of the many other eatery options on the block. If my hospital charges me too much for an xray then what?… I don’t see many people walking out of a hospital to go check prices next door because next door doesn’t exist until you drive 50 miles.

  • October 1, 2018 at 4:50 pm
    Dennis J Migliazzo says:
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    Suggestion: mandate by Federal Law that ALL Medical Providers only charge Medicare Rates….Benefits are the Same for ALL…Rx too.(just as on Medicare) All insurance carriers can Still sell coverage, and supps…A-whatever and individuals can choose the coverage.) The ones that suffer in this scenario will be the Medical Providers….(is that right? is that good?) ALL are covered with Basic Medicare benefits…ALL….carriers can go after the poor if they believe they can make money…just thinking…not saying this would work, but it would cause competition.

  • October 1, 2018 at 5:47 pm
    Agency says:
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    This is old news, they get more from non-health insurance policies and this was even happening in the 1990s. Here we are nearly 25 years later and it’s breaking?

    • October 2, 2018 at 11:44 am
      Puzzled in PA says:
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      To Agency:
      …and in that nearly 25 years, nothing has been done and it has only gotten worse. Unchecked greed only leads to more greed and the unfortunate payor is the customer who needs their services.

  • October 1, 2018 at 10:33 pm
    Boonedoggle says:
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    The actuaries for the automobile and WC writers seemingly have no problems determining rate adequacy for the egregious and discriminatory overcharging of the health care providers. Since auto and workers comp insurance is mandatory under state laws, the insurers know the market will be willing to fork up higher premiums to pay the higher billings. If these insurers were unhappy about the overcharges, they would vigorously be pursuing price rigging litigation under both State and Federal anti-trust laws.

    • October 2, 2018 at 8:51 am
      retired risk manager says:
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      Boonedoggle: FYI, Texas law allows employers to reject workers compensation and, if desired, set up an ERISA governed work injury benefit plan. Approximately 40% of TX employers do not purchase workers comp coverage. The savings, depending on the risk, can be up to 50% compared to workers comp. Insurance is available to fund the medical / legal exposures. As part of my practice, I helped employers manage the claims and price issues with the medical providers. It was amusing to see the price differential between clinics within the same provider chain. I called it “the spaghetti pricing model”. Throw it up against the wall and see what sticks. Or said differently, lets see how much we can try and charge before the employer screams. Never worked with my clients. We always paid according to the workers comp fee schedule. Never had a problem.

  • October 2, 2018 at 3:41 am
    Matt Lechner says:
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    Hospitals have become far more monopolistic than they used to be, and like America’s large corporations, they have “learned” how to take cover behind their lawyers – even when that leads to seriously improper corporate conduct. One of the places where “the rubber meets the road” so to speak, is egregious and completely unchecked price gouging by hospitals today, which in many cases they “back up” with fraudulent and abusive debt collection practices. And, if you bring the matter to the attention of senior management, they just look the other way and “refer it back to the finance department” who does their foul bidding, often via sick wall-of-blue type tactics. And if you bring it to the attention of the larget health system executives, such as Yale-New Haven who oversee many hospitals in a region – they totally ignore the reports. In my case, I had to get a rabies vaccine series at Norwalk Hospital, due to bat exposure, for which Norwalk Hospital presented a combined insurance/private pay invoice for approximately $17,000 (with no element of inpatient care, just the required out-patient innoculations). Previously, around three years ago, I received the same series of rabies innoculations via my physician’s office, and the bill came to approximately $1500. In other words, as compared the the physican’s office, Norwalk Hospital marked it up over 10x. And this is the kind of thing they do. Price gouging, which the top executives are totally aware of and allow, and they they dispatch their thug-like debt collectors if anyone takes issue with it. It is seriously improper corporate conduct, which has its roots in monopolistic service areas, and improper support from the legal community who shares in the spoils of it. And, the physicians in charge at the senior management level of the hospital and hospital netwrok systems such as Yale-New Haven pretend not to care, or simply do not care, because they are never held accountable for it. It is similar to the Mafia-based system that used to run the numbers rackets in America, with Mafia debt-collection muscle, before States stepped in with public lottery systems.

    • October 2, 2018 at 11:17 am
      Bill says:
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      I used to have to give my (now deceased) dog shots of insulin since she was diabetic. I purchased the same insulin that humans purchase for around $30. The same insulin for human use was around $100. Never could figure out that price difference.

      • October 8, 2018 at 4:58 pm
        Milner says:
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        Dogs don’t sue.

  • October 2, 2018 at 12:15 pm
    No fault of driver says:
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    In MI, no fault law is that 100% (no contractual allowance) of ‘reasonable charges’ is what the health care provider is allowed to charge. Many or most of the previous comments cover how the provider uses this to cover their other losses. It also is law that these injuries are covered for your lifetime.

    Yes, the power pendulum has swung to the providers, due in part to the baby boomers having Medicare coverage mandated by law. If you know someone who works in healthcare they often enjoy very good compensation — I tell my kids they and their descendants will be paying it off for years due to the under collection of premiums across the social programs, esp Medicare.

  • October 2, 2018 at 3:33 pm
    Retired Agent says:
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    My brother was chief of surgery at a large Florida hospital so I may be biased. This type of pricing is why we are headed for a single payor system in the next twenty-five years. A single payor system will not solve all our healthcare problems, but the public is fed up with our current system. The hospitals and physicians are killing the goose that lays the golden eggs. Mayo Clinic physicians are on a salary and not fee for service and they survive. I have been told that physicians use the smallest amount of healthcare services. Maybe they know something?

    • October 3, 2018 at 4:22 pm
      Agent says:
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      Physician Heal Thyself? Dangerous game to play.

  • October 5, 2018 at 9:42 am
    Adjuster says:
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    One problem with Anderson’s caution to choose your hospital carefully is that auto and WC injuries are seldom situations where the patient is able to choose their hospital. I doubt many EMTs or ambulance drivers even ask about where the patient wants to go. Many patients are unaware of which charge more, or have the presence of mind to state a preference, if they are able to talk at all at the time of their injury. In the medical industry, price comparison is very difficult, if its possible at all.

  • October 14, 2018 at 9:01 pm
    Bob says:
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    WC hospital bills are excessively high because there is no rate of payment contracts between an insurance carrier and the hospital. States can better control costs if they mandate the approved payment amount be based on what Medicare Pays for the same procedure code. Without this element of control, medical professionals and medical facilities can charge what ever the want, and under the current WC laws there are no controls.



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